Understanding Timecards, Taxes and Paychecks

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Understanding Timecards, Taxes and Paychecks
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Why do we need to keep a record of hours worked?

• To be paid for hours worked
• Employers keep detailed records of work that is
  finished.
• There are many forms or ways to keep track of
  hours worked.
• The most common is a time card.

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Time Cards

• Time cards will have the following information on
  them
• a. Your Name
• b. Date of time period
• c. Days of the week
• d. Slots for the time in and time out
• e. Some cards are stamped by a time clock
• f. Also in the form of a daily log.
• g. Time frame - monthly, bimonthly or
  weekly

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What is the purpose of a daily log?

• Daily Logs are similar to time cards but have an
  area to write a description of the work and time
  spent
• Colorado FFA record books use a daily log to
  track student work completed on a job.
• Large business use electronic time cards
• a magnetic strip card with employee information
  on it is swiped like a credit card
• A computer keeps track of the employees hours
  worked.

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What are state and federal pay check deductions?

• Deductions for things like taxes, insurance
  and social security are subtracted from your
  gross pay before you get the paycheck
• 1. Federal income tax.
• 2. State income tax.
• 3. Federal Insurance Contribution Act (FICA)
• A. Social Security
• B. Medicare

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What are state and federal pay check deductions?

• Federal Income Tax
• The amount of federal income tax withholding is
  based on marital status and withholding
  allowances.
• Employees may not base their withholding amounts
  on a fixed dollar amount or percentage.
• Employees may specify a dollar amount to be
  withheld in addition to the standard amount
  deduction from Form W-4.

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What are state and federal pay check deductions?

• State Income Tax
• Depends on the state and how much the withholding
  percentage is.
• Most states have a scale based on income that is
  used with the W-4 form and federal tax rates.

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What are state and federal pay check deductions?

• FICA is both Social Security and Medicare
  Deduction.
• Social Security
• The employee tax rate for social security is 6.2
  (amount withheld).
• The employer tax rate for social security is also
  6.2 (contributed by employer)
• The 2005 wage base limit was 90,000, in 2006 the
  wage base limit is 94,200.

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What are state and federal pay check deductions?

• Medicare
• The employee tax rate for Medicare is 1.45
  (amount withheld).
• The employer tax rate for Medicare tax is also
  1.45 (contributed by employer).
• There is no wage base limit for Medicare tax all
  covered wages are subject to Medicare tax.

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What are some other paycheck deductions?

• Depending on the employer there may be other
  deductions in your paycheck.
• Retirement Your employer may sponsor a
  retirement plan where they will match your
  contribution up to a certain
• Example - if you contribute 3 of your income
  they will match 3.
• Work related expenses employer may deduct for
  items like uniforms or other expenses that they
  will pay for you.

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Review

• 1.Why do we need to keep records of hours worked?
• 2. What is the purpose of a daily log?
• 3. What are state and federal paycheck
  deductions?
• 4.What are some other paycheck deduction?